Cap and Trade Rules
Tension on the Ocean Liner

By Dick Polman
Philadelphia Inquirer
March 25, 2009

During his press conference last night, President Obama essentially told the
nation: Have patience. Bear with me. Governing is hard. Or, as he actually put
it, "This is a big ocean liner. Itís not a speedboat. It doesnít turn around immediately."

And as for the critics who think he's overreaching and trying to do too much, he
answered that charge even though no reporter specifically asked the question; as
he sees it, "If we don't tackle energy, if we don't improve our education
system, if we don't drive down the costs of health care, if we're not making
serious investments in science and technology and our infrastructure," then the
economy "won't grow."

But let's focus on that theme about the travails of governing - or, more
specifically, Obama's looming problems with moderate and conservative Capitol
Hill Democrats who (among other things) dislike his "cap and trade" proposal to
cut the emission of greenhouse gases.

This came up early in the press conference. It was a key exchange. Here's a
lengthy excerpt from the transcript. Bear with me:

Jake Tapper, ABC News: "Right now on Capitol Hill, Senate Democrats are...not
including the cap-and-trade that you have in your budget....Will you sign a
budget if it...does not contain cap-and-trade?"

Obama: "....Now, we never expected, when we printed out our budget, that they
would simply Xerox it and vote on it. We assume that it has to go through the
legislative process. I have not yet seen the final product coming out of the
Senate or the House, and we're in constant conversations with them....When it
comes to cap-and-trade, the broader principle is that we've got to move to a new
energy era, and that means moving away from polluting energy sources towards
cleaner energy sources. That is a potential engine for economic growth. I think
cap-and-trade is the best way, from my perspective, to achieve some of those
gains, because what it does is it starts pricing the pollution that's being sent
into the atmosphere. The way it's structured has to take into account regional
differences. It has to protect consumers from huge spikes in electricity prices.

So there are a lot of technical issues that are going to have to be sorted
through...My expectation is that the Energy Committees or other relevant
committees in both the House and the Senate are going to be moving forward a
strong energy package. It will be authorized. We'll get it done. And I will sign it."

Tapper (recognizing that Obama hadn't answered his question): "Are you willing
to sign a budget that doesn't have" the cap-and-trade provision?

Obama: "No, I - what I said was that I haven't seen yet what provisions are in
there. The bottom line is, is that I want to see health care, energy, education,
and serious efforts to reduce our budget deficit. And there are going to be a
lot of details that are still being worked out, but I have confidence that we're
going to be able to get a budget done that's reflective of what needs to happen

in order to make sure that America grows."

Now I'll translate, because the most important stuff - the intraparty tension on
the ocean liner - was left unsaid.

Obama's ambitious domestic agenda has a lot of moving parts, but they're all
interconnected. "Cap-and-trade" is a classic example. Obama wants to curb carbon
emissions, for obvious reasons. His idea, boiled to its essence, is to make
private companies pay for their pollution of the air. (Actually, it's not his
idea; the concept has been kicked around in science circles since the '60s). The
government would basically auction off emission permits to industries. Obama's
budget team figures that this would raise $646 billion between 2012 and 2019; it
wants to plow some of that projected revenue into clean energy technologies, and
use another big chunk for middle-class tax cuts.

Naturally, the minority Republicans hate this idea; they also hate Obama's
ambitious budget. House leader John Boehner fumed yesterday that "this may be
the most irresponsible piece of legislation I've seen in my legislative career"
- this, from a guy who, like virtually all his GOP brethren, heartily embraced
George W. Bush's "WMD" Iraq war resolution. So we can basically dismiss the
GOP's current complaints as the usual chump change.

No, the real story here is the Democratic resistance, the resurfacing tensions
between the liberal base and the moderate/conservative camp.

In Obama's ideal world, the cap-and-trade program would be folded into the
budget; under Senate rules, the budget can be passed with a mere 51 votes...and,
remember, the Senate Democrats on paper have 58 votes. But because so many
Senate Democrats have signaled that they want cap-and-trade removed from the
budget - eight of them, including Pennsylvania's Bob Casey and Indiana's Evan
Bayh, have already put this in writing - that would appear to put the kibosh on
easy passage of Obama's signature environmental idea.

The alternative scenario is for cap-and-trade to move along as separate
legislation, but that would require a filibuster-proof 60 votes for passage.
Good luck to that. Translation: Cap-and-trade is probably dead this year, if not
next year as well.

Among those Democratic senators who are resisting quick passage of
cap-and-trade, there is also a regional factor. Carl Levin hails from Michigan;
Robert Byrd hails from West Virginia. Those states get much of their energy from
coal-fired plants; under an Obama program, the utilities that run those plants
are likely to pay a pretty price for their carbon emissions. And the fear, in
the affected states, is that the price would be passed down to the consumers.
Which is why, earlier this month, the Detroit News editorialized that Obama's
program is "a giant economic dagger aimed at the nation's heartland."

Liberal activists who support Obama's agenda have already labeled the resistant
Democratic lawmakers as "more treacherous" than the GOP, complaining that "they
want to nuzzle up to the conservative obstructionists." The activists do make
the valid point that Obama will look bad in December if he shows up empty-handed
at the Copenhagen Climate Conference, with no proof that he can actually lead
the world on environmental issues...but that won't budge the Democratic critics
of cap-and-trade, nor lessen the potential long-term intraparty tensions between left and center.

Such was the subtext of the Tapper-Obama exhange last night. Such are the
current travails of Democratic governance.


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